Wednesday, February 9, 2011

Fusion TMX Group and the London Stock Exchange

It's confirmed, the London Stock Exchange announced it had reached agreement with the executive of TMX Group, Toronto, for a merger between two companies, early Wednesday morning. The LSE has made a bid of major importance for Canada: it wants to buy the TSX. When the transaction is completed, shareholders of London Stock Exchange Group (lseg) will own 55% of the merged group, while those of TMX will have 45%. Each shareholder will receive 2.99 shares of TMX lseg regular part of a deal approved unanimously by the boards of both companies. The transaction would be $ 3.2 billion, so that at present, the TMX is 2.99. Obviously, regulatory authorities in each country to accept this market before it becomes a reality. If so, the entity shall be sized giant. It has more than 6,700 listed companies in two dozen exchanges around the world. Its revenues should increase by $ 56 million within three years and $ 160 million within five years. The cost savings, often dubbed the "synergies" are valued at $ 56 million within two years. Montreal, still the heart of derivatives The lseg said he recognizes the strengths of each of its divisions, Montreal retaining control of derivatives. Calgary would remain a hub for energy. The new entity would keep the names of its existing brands. It would have dual headquarters, divided between London and Toronto. Chairman of the Board of Directors would be Wayne Fox, who occupies the same seat TMX Group. Xavier Rollet, CEO of lseg, would do the same job in the combined entity. Thomas Kloet, CEO of the Toronto Stock Exchange, would be appointed president and will report to Xavier Rolet.